Rio Tinto Group Chief Executive
Officer Tom Albanese said “resource nationalism” may spread as
governments around the world seek to boost their share of mining
profits, potentially constraining supply.

“They will want to increase their revenue share,”
Albanese, 52, told a mining industry function yesterday in
London. “They will want to have more control of who develops
their natural resources. And this resource nationalism could, by
itself, limit the supply response to stronger demand.”

China, the world’s biggest metals consumer, said it plans
to extend a tax on oil, gas and coal output to the entire
nation, after introducing the levy in Xinjiang province last
month. Australia last week scaled back a proposed new mining
profits tax after Rio, BHP Billiton Ltd. and Xstrata Plc led a
campaign against the original plan.

“Whether these tax concepts will spread elsewhere,
especially in developing countries, will depend on the
particular circumstances of the investment opportunity,”
Albanese said. “While it may be appropriate in Australia it may
not necessarily suit a developing country.”

Rio gained 1.6 percent to A$68.10 in Sydney trading on the
Australian stock exchange. The stock advanced 3.2 percent in
London to close at 3,172.5 pence.

Citigroup Inc. analysts said in May that Canada, Peru and
Chile may follow Australia in boosting mining taxes. China will
set a benchmark rate of 5 percent that will vary across
commodities, Du Ying, vice chairman of the National Development
and Reform Commission, said in Beijing yesterday. It’s unclear
when it will be applied nationwide, he said.

Rudd’s Ouster

Rio is the world’s third-largest mining company and second-
biggest exporter of iron ore, used to make steel. It’s planning
major mine investments in Australia, Guinea and Mongolia,
Albanese said yesterday.

In Australia, former Prime Minister Kevin Rudd’s plan to
impose a 40 percent tax on mining company profits led to his
ouster as his approval ratings slumped amid opposition from
mining companies. His successor, Julia Gillard, trimmed the
proposed levy to 30 percent and said it would only apply to coal
and iron-ore mines to win the industry’s support.

Rio resumed a review of expansion options in Australia
against a more “positive backdrop,” Albanese said. Xstrata,
the world’s biggest exporter of power-station coal, this week
said it has resumed work on a A$6 billion ($5.2 billion) coal
project.

“I do want to invest in Australia and recent events remove
the great uncertainty which had been holding us back,” Albanese
said. “And I am keen to get projects moving again.”

Rio is considering an expansion to 300 million tons by 2015
from 220 million tons at its operations in Western Australia’s
Pilbara region. An expansion of the mines may cost A$12 billion
($11 billion), Citigroup Inc.’s Clarke Wilkins said in a report
in May.